Research Publication

This chapter contains some methods for quantitatively analyzing multiple-agent models of dynamic games in which at least one agent takes into account its influence on the aggregate environment. We confine our attention to models in which the agents solve stochastic, quadratic optimization problems subject to linear constraints. A convenient feature of such models is that the equilibrium laws of motion are linear in the relevant state variables and can be deduced easily. Consequently, we can obtain tractable characterizations of the empirical implications of the models under alternative rules for how the agents interact.

@article{hansen:1985,
  title={Linear-Quadratic Duopoly Models of Resource Depletion},
  author={Hansen, Lars P and Epple, Dennis and Roberds, William},
  journal={Energy, Foresight and Strategy},
  year={1985}
}